diff --git a/src/Parse.jl b/src/Parse.jl
index 10d121db..066d5945 100644
--- a/src/Parse.jl
+++ b/src/Parse.jl
@@ -200,6 +200,21 @@ end
     )
 end
 
+_replace_imaginary_unit_symbol(ex) = ex
+@unstable _replace_imaginary_unit_symbol(ex::Symbol) = ex === :im ? im : ex
+function _replace_imaginary_unit_symbol(ex::Expr)
+    return Expr(ex.head, map(_replace_imaginary_unit_symbol, ex.args)...)
+end
+
+@unstable function _normalize_expression_for_parse(
+    ex, variable_names::Union{AbstractVector{<:AbstractString},Nothing}
+)
+    if variable_names !== nothing && ("im" in variable_names)
+        return ex
+    end
+    return _replace_imaginary_unit_symbol(ex)
+end
+
 """Parse an expression Julia `Expr` object."""
 @unstable function parse_expression(
     ex;
@@ -237,11 +252,14 @@ end
             operators
         end
 
+        ex = _normalize_expression_for_parse(ex, variable_names)
         tree = _parse_expression(ex, operators, variable_names, N, E, evaluate_on; kws...)
         return constructorof(E)(tree; operators, variable_names, kws...)
     end
 end
 
+@unstable parse_expression(ex::String; kws...) = parse_expression(Meta.parse(ex); kws...)
+
 """An empty module for evaluation without collisions."""
 module EmptyModule end
 
diff --git a/test/test_parse.jl b/test/test_parse.jl
index 50121888..7e9c8f99 100644
--- a/test/test_parse.jl
+++ b/test/test_parse.jl
@@ -44,6 +44,51 @@
     end
 end
 
+@testitem "String parse treats Julia imaginary unit `im` as a constant" begin
+    using DynamicExpressions
+    using Test
+
+    operators = OperatorEnum(;
+        binary_operators=[+, -, *, /], unary_operators=[], define_helper_functions=false
+    )
+
+    ex = parse_expression("0.1im + x"; operators, variable_names=["x"])
+    @test typeof(ex) <: Expression{ComplexF64}
+
+    function count_vars(n)
+        if n.degree == 0
+            return n.constant ? 0 : 1
+        elseif n.degree == 1
+            return count_vars(n.l)
+        else
+            return count_vars(n.l) + count_vars(n.r)
+        end
+    end
+
+    @test count_vars(ex.tree) == 1
+
+    # Check evaluation + eltype
+    Xr = reshape([1.0], 1, :)
+    yr = ex(Xr)
+    @test eltype(yr) == ComplexF64
+    @test yr[1] ≈ 1.0 + 0.1im
+
+    Xc = reshape([1.0 + 2.0im], 1, :)
+    yc = ex(Xc)
+    @test eltype(yc) == ComplexF64
+    @test yc[1] ≈ 1.0 + 2.1im
+
+    # If `"im"` is in `variable_names`, it should be treated as a variable
+    ex2 = parse_expression("im + x2"; operators, variable_names=["im", "x2"])
+    @test typeof(ex2) <: Expression
+    @test count_vars(ex2.tree) == 2
+
+    X2 = reshape(Float32[2, 3], 2, :)
+    y2 = ex2(X2)
+    @test eltype(y2) == Float32
+    @test y2[1] == 5.0f0
+end
+
 @testitem "Can also parse just a float" begin
     using DynamicExpressions
     operators = OperatorEnum()  # Tests empty operators